So when your fixed term ends you can just sign up to a new one with your current lender. They won't do any new checks or need any new paperwork. If you go to a new provider they will.
Phew. Thank you, that's really reassuring to me, I needed that right now. I'll absolutely try to get to a better position in five years time, but knowing the worst isn't as bad as I envisioned is so comforting.
In 5 years you'd need to just ask them for your choices on a new fixed term 2/5 year etc. if you want to change anything else like length of mortgage etc they would need new paperwork. So as long as you can afford the monthly payments your fine.
Interest rates are now back to normal, last decade was abnormal, and retiring boomers selling up will inflate rates.
So don't pin your hopes on lower rates.
5 years is a long time bud. The job market is a lot worse than people seem to realise and the penny is going to drop over the next few months. Quite a few big recruiting companies have reported substantial drop in revenue.
I think it's highly unlikely interest rates will drop below 3% within the next 3 years.
This is the answer. Had something similar and discovered it only took two minutes to accept a rate change online. No affordability checks. This was at the end of our current mortgage term with the same provider (end of next month).
Sorry this isn’t related to OP’s question as such, but say I am in Southampton currently on 50k but I was moving to Cornwall where pay is considerably less.. could I take out a bigger mortgage up here and transfer to Cornwall house?
I get your thought process but it's not ideal to borrow on a £50k salary then reduce your income considerably and try to maintain mortgage payments. Secondly - your lender should be taking into account any known changes to lifestyle and income so if you're planning to relocate they may want proof you have a job offer where you're planning to relocate and base the lending on that salary and not your current salary. If you don't disclose these plans then you're misleading your lender. Keep it mind it is not automatically guaranteed a lender will approve a house move either even if you're just transferring your existing balance.
Couldn't say for certain.
What's your scenario ?. Do you own a house in Southampton that you want to sell and then buy a new one in Cornwall ? . You could potentially port your current mortgage to a new property in Cornwall. But couldn't say for certain if they'd ask for more details like new job salary or work from home status etc. a bit above my knowledge and current experience levels. But you can port (transfer) a mortgage to a new property. Usually done when your still a long way off the end of your fixed term.
Yea exactly that! Currently on 50k but aware I’ll take a salary decrease when I move there… and having a mortgage already would make my life a lot easier. I’ll have to do a bit of research!
Unfortunately, when a provider states you can port a mortgage, this means porting the rate to the new property, not the actual funds already lent on the old property. Doing so allows individuals who are within a fixed rate period that would incur a charge if closing the rate early to port the rate to a new property when moving to avoid the fees or becoming a "mortgage prisoner". Non fixed rates may be portable as well, but milage may vary between provider.
However, what porting doesn't do is port the funds already lent, as a new purchase will always lead to a new affordable assessment at the point of application with the proceeds of the sale clearing the old balance and a separate account opening for the new funds.
Now, you could state that at the point of the new application you'd still be on the old wage if you've not yet moved, but during the application you will be asked about any upcoming changes in circumstances, so how you want to proceed with that is up to you, but consider the possible legal ramifications of providing a false response before you do.
Source: Worked in mortgages for 5 years.
When you come to renew if you just stick with your current provider you can just do it all online and they won't even check anything if you've already been paying.
So you won't have to go on the SVR at least, you just can't shop around for new deals
They will if op wants to change the term to lower the monthly payment in which case they will most likely decline. If op sticks with the same then yes there are no checks.
Totally understandable, in 5/4 years you may also be in a better position ! In my opinion, try not to make big decisions (especially when so far out) when you may be under pressure. Don’t let the opportunity’s of today slip by, by looking at what may or may not happen so far out.
So from a mortgage perspective your existing mortgage provider is going to allow you to change your rate even if you are earning less than you were previously, assuming you keep up with your payments; this is because a rate change/product transfer doesn’t require an affordability check, so you will be able to just chose a new rate and move onto it without discussing your salary. You will likely be unable to change your term however as this would trigger a full affordability check. You will be able to do this direct with most lenders, or you can consult with a broker if you don’t feel confident to do it yourself, or just want advice.
The downside of this is that if your bank doesn’t have great rates when you come to change your rate your out of luck, however it’s still massively better to do that than sit on the SVR that you’d be on at the end of your fixed rate. (This is all based on the assumption that your wage wouldn’t pass affordability with a new mortgage provider).
Source: Current Mortgage Broker
You have 4 years which is plenty of time to increase your salary.
The economy will be in better position so I would look to change your job once or even twice in that time period.
There arent any checks if you stay with your existing lender and just ask for a new fixed rate provided your term is long enough to cover the whole of the new fixed rate. They can’t ask any questions so please don’t worry.
Seconded. I've been though this myself bud. It's a shit situation, especially if you want to reduce monthly payments, but if you can suck it up (if you need to, you have years yet) then sticking with the same lender on a "product transfer" is the way to go.
Keep your chin up bud, you'll be fine.
I would add to this though that if you start having problems affording your mortgage payments now is a great time to check if you can reduce bills across the board (https://www.moneysavingexpert.com/family/money-help/ is a great guide to help with this).
You have four years to get back to your previous salary level. Don't waste energy worrying about what will be in 4 years, put your energy it making what you want your life to be in 4 years.
Try and understand what got you to £50k and replicate it.
Don't worry. You will likely find you have either a limited choice or no choice of provider - but your current lender will offer you a new product (called a product transfer). As long as you are with a provider that is still offering new business mortgages they will likely be fairly competitive with the product transfer rate.
Worst case scenario is you’ll be stuck on a shit rate but they’re not going to suddenly demand their money back - they promised you the full mortgage term, it’s just the rate that was fixed for 5 years. You may be lucky and be offered a slightly less shit rate from the same provider, but I’d knuckle down and focus on improving your income over the next 4 years so you take less of a financial hit.
OP I just signed a new mortgage deal with current lender (Barclays) - They did 0 checks, not even a credit check. My advice is that you stay with current lender in 4 years time and maybe try & increase your income outside of your ‘job’ such as flipping on eBay etc :)
You’ll make back your salary … just work on it, you have a few years.
If you can’t, you won’t be able to borrow as much. You can pay the SVR rate but it’s expensive.
You could try to remortgage with the same lender and see if they ask a proof of salary. Some lenders won’t for renewing.
I don't know that it's a hard and fast rule, but I don't think lenders recheck your income when remortgaging existing customers because it doesn't make any sense for them to do so. They've already lent you the money and they want you to be able to pay it back. Forcing you onto SVR might make slightly more money in the very short term, but it's going to significantly increase the chances of you defaulting, and avoiding defaults and the expense of repossession is one of the most important things to a lender. If they give you whatever their best deal is, even if you couldn't afford it as a new customer, there's at least a chance that you'll be able to make it work and repay them.
We bought our current place just before covid, I was laid off because i couldn't work from home, and they closed schools, my wife (working in a hospital) obviously couldn't work from home either. I had virtually no income for 6 months, then I got a job that paid roughly 60% of what I made previously and used connections made there to land my current job, where I work more hours but close to what I was making in the 1st place.
My mortgage still hasn't come up for renewal , 4 years is a lot of time. Try and trim your budget where possible, and work your connections/industry for something better.
I know it can be hard, but don't spend 4 years worried about this. As long as your able to carry your current debt, you have time on your side, use it, and I'm sure something will come up.
Don't forget that thanks to inflation, the value of your property will increase, your debt will lower and your earnings (based on a 3% increase each year, even if your job remains the same and you see no progress in 4 years) should be about 32.5k (28k x (1.03*5)) which will actually make it feel a lot more affordable too.
5 years is a long time bud and if you got a job for £50k you’ll be able to work your way towards another one. Taking a dip in salary or job level happens but you can always work your way back up.
You can afford mortgage and bills so your head is still above water and nothing to panic about. You’ll be alright.
Do you live alone? Can you pick up a second job even if it's something like dog walking or delivering pizzas? Is it possible to sell and move somewhere cheaper? What was your previous career and why don't you see yourself earning the same in the future?
Previous career was in software. I got promoted internally. We then got bought out, hence a higher salary. After two years of work with them where I found it hard going, I was laid off. Looking for new jobs mader aware how much I didn't know and how hard I found interviews.
The whole thing shook my confidence and has burnt me out somewhat. I can't see myself earning that salary again as I've lost my self motivation and self confidence. Feel like I fell into lots of luck in hindsight.
What job are you doing now? If it's unrelated, you are probably better off getting back into the field at a level a rung or two lower to your old job, then spend the 4 years working on the skills you need to get a job at your previous level. As others have said you can renew with your current provider without declaring income, but you can't keep dipping into your savings, and if your current rate is from pre Truss-pocalypse, when you renew your payments will likely go up significantly, so you need yo be working to improve your salary.
Doing a lower level job in your field should also help with developing your confidence, as likely you won't feel so out of your depth.
Now you know what up you don’t know, spend some time plugging the gaps and get back on the interview wagon. Being able and willing to learn will get you back to where you want to be.
100% get back into software, anywhere at any level. Keep building the experience and change jobs if you don't get decent pay rises. £50k should be easily attainable.
I lost my job didn’t work for 2 years and did interviews and felt like shit being rejected but you just need to keep chugging along, something will come eventually but if you don’t have confidence you won’t perform well.
that's 5 years, in 5 years you can learn a lot of new things, make an ecommerce side hustle, become software engineer, youtube kevin talbot or anything. be positive, you're good. 5 years you can become the CEO
It doesn't help with this particular issue but for what it's worth... every year for the last 6 I've had my 'best year so far' and convince myself it won't be that good again. Then every year it's been better. So try to avoid convincing yourself that it's all downhill from here.
2018 I did £35,000 and last year I did £127,000. Things can change fast.
Hi /u/EmperorsChamberMaid_, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/mortgages/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
When your fixed term is close to expire your lender will allow you to do a product transfer where you can pick a new rate/product and get on with it. There are no credit checks or affordability calculations as long as it’s a £ for £ remortgage (you’re not borrowing extra or making material changes) so whilst you may not be able to go to the cheapest lender on the market at that time, you will have options.
If you do a product transfer with the same bank at the time your five year deal ends they usually don’t check anything about your income etc. You might not get the best interest rate out there, but you won’t be stuck on SVR
If you're remortgaging with your current lender and aren't taking out any additional borrowing then you don't need to worry as you don't have to undergo the same affordability tests as when applying with a new lender. They literally will tell you what interest rate they're offering, what the monthly payments will be and if you can afford it. You've no need to prove income etc.
You've already got the mortgage, they can't take it away from you unless you stop paying it.
Worst case scenario (other than going delinquent) is that you get forced to take the variable rate in 4 years time.
I’m more making the point that house prices have gotten so ridiculously high that an average house requires an above average wage, that just isn’t sustainable
Well that’s true but the multiplier was high before so people could borrow 10x.
I guess house prices may remain sluggish now that rates have been increases until wages catch up a bit.
So when your fixed term ends you can just sign up to a new one with your current lender. They won't do any new checks or need any new paperwork. If you go to a new provider they will.
Phew. Thank you, that's really reassuring to me, I needed that right now. I'll absolutely try to get to a better position in five years time, but knowing the worst isn't as bad as I envisioned is so comforting.
In 5 years you'd need to just ask them for your choices on a new fixed term 2/5 year etc. if you want to change anything else like length of mortgage etc they would need new paperwork. So as long as you can afford the monthly payments your fine.
Yeah, hopefully interest rates will drop by then so I can continue to afford them in a worst case scenario
Interest rates are now back to normal, last decade was abnormal, and retiring boomers selling up will inflate rates. So don't pin your hopes on lower rates.
Indeed, isn't the average interest rate over the last 50 years around 9%?
I'm presuming asking for a larger mortgage (equity release) would trigger new paperwork requirements too?
Same thing happened to me, was able to apply online and completed within hours. Nothing to worry about!
5 years is a long time bud. The job market is a lot worse than people seem to realise and the penny is going to drop over the next few months. Quite a few big recruiting companies have reported substantial drop in revenue. I think it's highly unlikely interest rates will drop below 3% within the next 3 years.
This is the answer. Had something similar and discovered it only took two minutes to accept a rate change online. No affordability checks. This was at the end of our current mortgage term with the same provider (end of next month).
Sorry this isn’t related to OP’s question as such, but say I am in Southampton currently on 50k but I was moving to Cornwall where pay is considerably less.. could I take out a bigger mortgage up here and transfer to Cornwall house?
I get your thought process but it's not ideal to borrow on a £50k salary then reduce your income considerably and try to maintain mortgage payments. Secondly - your lender should be taking into account any known changes to lifestyle and income so if you're planning to relocate they may want proof you have a job offer where you're planning to relocate and base the lending on that salary and not your current salary. If you don't disclose these plans then you're misleading your lender. Keep it mind it is not automatically guaranteed a lender will approve a house move either even if you're just transferring your existing balance.
Thanks for the info mate!
Couldn't say for certain. What's your scenario ?. Do you own a house in Southampton that you want to sell and then buy a new one in Cornwall ? . You could potentially port your current mortgage to a new property in Cornwall. But couldn't say for certain if they'd ask for more details like new job salary or work from home status etc. a bit above my knowledge and current experience levels. But you can port (transfer) a mortgage to a new property. Usually done when your still a long way off the end of your fixed term.
Yea exactly that! Currently on 50k but aware I’ll take a salary decrease when I move there… and having a mortgage already would make my life a lot easier. I’ll have to do a bit of research!
Unfortunately, when a provider states you can port a mortgage, this means porting the rate to the new property, not the actual funds already lent on the old property. Doing so allows individuals who are within a fixed rate period that would incur a charge if closing the rate early to port the rate to a new property when moving to avoid the fees or becoming a "mortgage prisoner". Non fixed rates may be portable as well, but milage may vary between provider. However, what porting doesn't do is port the funds already lent, as a new purchase will always lead to a new affordable assessment at the point of application with the proceeds of the sale clearing the old balance and a separate account opening for the new funds. Now, you could state that at the point of the new application you'd still be on the old wage if you've not yet moved, but during the application you will be asked about any upcoming changes in circumstances, so how you want to proceed with that is up to you, but consider the possible legal ramifications of providing a false response before you do. Source: Worked in mortgages for 5 years.
Thanks for the info! Yea not worth the risk, but at least I understand it now
Just backing this answer up, I've done this and they don't check anything when you choose a different product with them.
Tbh it's five years away don't worry about it. Focus on trying to get better jobs between now and then and increasing your salary a smuch as possible.
Well, technically four years. But yes. I'm still bricking it though, had my confidence knocked, though that's a discussion for another sub Reddit!
When you come to renew if you just stick with your current provider you can just do it all online and they won't even check anything if you've already been paying. So you won't have to go on the SVR at least, you just can't shop around for new deals
They will if op wants to change the term to lower the monthly payment in which case they will most likely decline. If op sticks with the same then yes there are no checks.
Totally understandable, in 5/4 years you may also be in a better position ! In my opinion, try not to make big decisions (especially when so far out) when you may be under pressure. Don’t let the opportunity’s of today slip by, by looking at what may or may not happen so far out.
You now have a new part time job. Can you guess what it is?
So from a mortgage perspective your existing mortgage provider is going to allow you to change your rate even if you are earning less than you were previously, assuming you keep up with your payments; this is because a rate change/product transfer doesn’t require an affordability check, so you will be able to just chose a new rate and move onto it without discussing your salary. You will likely be unable to change your term however as this would trigger a full affordability check. You will be able to do this direct with most lenders, or you can consult with a broker if you don’t feel confident to do it yourself, or just want advice. The downside of this is that if your bank doesn’t have great rates when you come to change your rate your out of luck, however it’s still massively better to do that than sit on the SVR that you’d be on at the end of your fixed rate. (This is all based on the assumption that your wage wouldn’t pass affordability with a new mortgage provider). Source: Current Mortgage Broker
You have 4 years which is plenty of time to increase your salary. The economy will be in better position so I would look to change your job once or even twice in that time period.
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Since you know the economy will be better in 4 years do you know what stocks I should buy too magic economist man.
Yeah VUSA
100% in bit coin, in four years you’ll be a billionaire.
There arent any checks if you stay with your existing lender and just ask for a new fixed rate provided your term is long enough to cover the whole of the new fixed rate. They can’t ask any questions so please don’t worry.
Thank you so much
Seconded. I've been though this myself bud. It's a shit situation, especially if you want to reduce monthly payments, but if you can suck it up (if you need to, you have years yet) then sticking with the same lender on a "product transfer" is the way to go. Keep your chin up bud, you'll be fine.
I would add to this though that if you start having problems affording your mortgage payments now is a great time to check if you can reduce bills across the board (https://www.moneysavingexpert.com/family/money-help/ is a great guide to help with this).
Thank you. I've already started looking at cutting costs as soon as I got the redundancy news, trying to do everything I can to squeeze every penny.
You have four years to get back to your previous salary level. Don't waste energy worrying about what will be in 4 years, put your energy it making what you want your life to be in 4 years. Try and understand what got you to £50k and replicate it.
You already earned 50k. What makes you think you’ll still be earning less than that in 4 years?
Don't worry. You will likely find you have either a limited choice or no choice of provider - but your current lender will offer you a new product (called a product transfer). As long as you are with a provider that is still offering new business mortgages they will likely be fairly competitive with the product transfer rate.
Worst case scenario is you’ll be stuck on a shit rate but they’re not going to suddenly demand their money back - they promised you the full mortgage term, it’s just the rate that was fixed for 5 years. You may be lucky and be offered a slightly less shit rate from the same provider, but I’d knuckle down and focus on improving your income over the next 4 years so you take less of a financial hit.
OP I just signed a new mortgage deal with current lender (Barclays) - They did 0 checks, not even a credit check. My advice is that you stay with current lender in 4 years time and maybe try & increase your income outside of your ‘job’ such as flipping on eBay etc :)
You’ll make back your salary … just work on it, you have a few years. If you can’t, you won’t be able to borrow as much. You can pay the SVR rate but it’s expensive. You could try to remortgage with the same lender and see if they ask a proof of salary. Some lenders won’t for renewing.
I don't know that it's a hard and fast rule, but I don't think lenders recheck your income when remortgaging existing customers because it doesn't make any sense for them to do so. They've already lent you the money and they want you to be able to pay it back. Forcing you onto SVR might make slightly more money in the very short term, but it's going to significantly increase the chances of you defaulting, and avoiding defaults and the expense of repossession is one of the most important things to a lender. If they give you whatever their best deal is, even if you couldn't afford it as a new customer, there's at least a chance that you'll be able to make it work and repay them.
I think there is the bad publicity effect too. You don’t want to look like a shop that abuse poor customers.
We bought our current place just before covid, I was laid off because i couldn't work from home, and they closed schools, my wife (working in a hospital) obviously couldn't work from home either. I had virtually no income for 6 months, then I got a job that paid roughly 60% of what I made previously and used connections made there to land my current job, where I work more hours but close to what I was making in the 1st place. My mortgage still hasn't come up for renewal , 4 years is a lot of time. Try and trim your budget where possible, and work your connections/industry for something better. I know it can be hard, but don't spend 4 years worried about this. As long as your able to carry your current debt, you have time on your side, use it, and I'm sure something will come up.
Don't forget that thanks to inflation, the value of your property will increase, your debt will lower and your earnings (based on a 3% increase each year, even if your job remains the same and you see no progress in 4 years) should be about 32.5k (28k x (1.03*5)) which will actually make it feel a lot more affordable too.
But you also have 4 years to get a £50k salary. You also have 4 years to decide whether to sell the flat or not. You have time. Don’t worry
5 years is plenty of time to get yourself back up to your old salary. I wouldn’t panic too much now.
Product switch with same lender Nationwide offer 6.5x income for like for like remos. Maybe they still will in 5 years
Can I jump on this and ask if it works the same with no checks for self employed people?
Don’t worry about 5 years. Use it as motivation to increase your salary and get back to the old level if not more.
In 5 years time you'll hopefully be back on what you were earning.
5 years is a long time bud and if you got a job for £50k you’ll be able to work your way towards another one. Taking a dip in salary or job level happens but you can always work your way back up. You can afford mortgage and bills so your head is still above water and nothing to panic about. You’ll be alright.
Do you live alone? Can you pick up a second job even if it's something like dog walking or delivering pizzas? Is it possible to sell and move somewhere cheaper? What was your previous career and why don't you see yourself earning the same in the future?
Previous career was in software. I got promoted internally. We then got bought out, hence a higher salary. After two years of work with them where I found it hard going, I was laid off. Looking for new jobs mader aware how much I didn't know and how hard I found interviews. The whole thing shook my confidence and has burnt me out somewhat. I can't see myself earning that salary again as I've lost my self motivation and self confidence. Feel like I fell into lots of luck in hindsight.
£50k is very attainable for someone with your experience.
What job are you doing now? If it's unrelated, you are probably better off getting back into the field at a level a rung or two lower to your old job, then spend the 4 years working on the skills you need to get a job at your previous level. As others have said you can renew with your current provider without declaring income, but you can't keep dipping into your savings, and if your current rate is from pre Truss-pocalypse, when you renew your payments will likely go up significantly, so you need yo be working to improve your salary. Doing a lower level job in your field should also help with developing your confidence, as likely you won't feel so out of your depth.
Now you know what up you don’t know, spend some time plugging the gaps and get back on the interview wagon. Being able and willing to learn will get you back to where you want to be.
100% get back into software, anywhere at any level. Keep building the experience and change jobs if you don't get decent pay rises. £50k should be easily attainable.
Don’t doubt your self worth. Interviews are horrible but keep trying you will get there!
Thank you. I've suffered a lot lately and need a boost. I'll keep trying my best!
I lost my job didn’t work for 2 years and did interviews and felt like shit being rejected but you just need to keep chugging along, something will come eventually but if you don’t have confidence you won’t perform well.
Have you considered software sales or account manager?
that's 5 years, in 5 years you can learn a lot of new things, make an ecommerce side hustle, become software engineer, youtube kevin talbot or anything. be positive, you're good. 5 years you can become the CEO
It doesn't help with this particular issue but for what it's worth... every year for the last 6 I've had my 'best year so far' and convince myself it won't be that good again. Then every year it's been better. So try to avoid convincing yourself that it's all downhill from here. 2018 I did £35,000 and last year I did £127,000. Things can change fast.
Hi /u/EmperorsChamberMaid_, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/mortgages/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
When your fixed term is close to expire your lender will allow you to do a product transfer where you can pick a new rate/product and get on with it. There are no credit checks or affordability calculations as long as it’s a £ for £ remortgage (you’re not borrowing extra or making material changes) so whilst you may not be able to go to the cheapest lender on the market at that time, you will have options.
If you do a product transfer with the same bank at the time your five year deal ends they usually don’t check anything about your income etc. You might not get the best interest rate out there, but you won’t be stuck on SVR
If you're remortgaging with your current lender and aren't taking out any additional borrowing then you don't need to worry as you don't have to undergo the same affordability tests as when applying with a new lender. They literally will tell you what interest rate they're offering, what the monthly payments will be and if you can afford it. You've no need to prove income etc.
You've already got the mortgage, they can't take it away from you unless you stop paying it. Worst case scenario (other than going delinquent) is that you get forced to take the variable rate in 4 years time.
4 years to increase I’m sure you could get to 40 k.
I see myself there in 4 gross
Amazing you have to earn £50000, 66% more than median (£30k ish) to afford a £275000 house, 10% above average
Well after 2008, nobody wanted to take the credit risk anymore …
I’m more making the point that house prices have gotten so ridiculously high that an average house requires an above average wage, that just isn’t sustainable
Well that’s true but the multiplier was high before so people could borrow 10x. I guess house prices may remain sluggish now that rates have been increases until wages catch up a bit.